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What are Passive Investing and Passive Investors? Passive investing and passive investors are ones who opt to ride the market out over the long ter...

The Investment Company Act of 1940 regulated and ensured fair dealings in the mutual fund industry.

What do you need to retire? Retirement - think: 401k, pension fund, IRA, roth IRA, etc. All of these savings socked away while you worked hard are...

What is Contingent Liability? Contingent liability refers to a possible liability in the future contingent upon some other event being the trigger....

What are T-Notes, T-Bonds, and TIPS? T-Notes are debt securities (like bonds) that are issued by the government and mature within one to 10 years....

What are bond ratings and what do they mean? Bond ratings are just credit ratings used on bonds. Just like a credit rating, they give the investor...

What is real return? Real return is the actual return made from an investment after inflation is factored in. Return is expressed as a percentage c...

What are the types of income tax? Federal income tax. State income tax. Real estate tax. Value Added Tax (VAT). Some tax is progressive, some tax i...

Tax basis is your cost for assessing how much you owe in taxes, and is determined by multiplying your gains by your tax rate.

What is term life insurance, and variable life insurance? Hit play to find out, and, uh...let's hope you live long enough to figure out the answers.

What are systematic and unsystematic risk? Take a risk on this video and hit play.

What is Accrual Accounting? Accrual accounting is used to determine how well a company is doing by looking at the present and the future. It takes...

Unearned income is more than just the lunch money you stole on the playground. Hit play to find out more about unearned and earned income. And mayb...

What is Accrued Interest? Most bonds pay interest on a fixed calendar schedule, which can be quarterly, bi-annually, or annually. The interest earn...

A redemption charge is a charge applied when you redeem shares of a mutual fund in a deferred commission purchase structure.

What was the Tax Reform Act of 1986? Hit play to find out.

What is AMBAC? AMBAC stands for American Municipal Bond Assurance Corporation. It provides insurance for municipalities that sell muni bonds, such...

A trust deed lays out the rights and obligations of the bank underwriting the purchase of inventory/assets. That said, it won't catch you in a trus...

PERLS is a bond that pays interest twice a year, but whose yield is linked to a given foreign exchange rate. It also doesn't string very well on a...

What is an LLC? LLC stands for Limited Liability Company. It is a hybrid type of company that combines the corporate protections of separating corp...

What is paid-in-capital and capital surplus? Hit play to find out.

A pooled interest occurs when two or more investors combine capital in order to make a joint investment. Especially if investing in a prosthetics company.

What are pension liabilities? Pension liability is the difference in what an entity owes in pension payments versus how much they have on hand to cover the payments. Hopefully, and usually, this number is positive, meaning the company has more than what they need to cover their employees’ pensions upon retirement.

What does it mean to die intestate, and have your estate go into probate? Whatever it means, it'd make a decent rhyme in a financial rap.

What is a Bubble? In markets and economic cycles, any kind of rapid run up trend characterized by over exuberance and emotion over fundamentals that is followed by a collapse and subsequent contraction is called a bubble. The analogy is not unlike that of a soap bubble: it expands rapidly and its fragility inevitably leads to the bubble bursting when it gets too large.

What is a Block Trade? A Block Trade just means that a very big number of securities are being traded, either bought or sold. The group of securities is referred to as a block.

What are high yield/junk bonds? Junk bonds are called junk for a reason. They are really risky, but because of this risk, they can pay very well. They also have low credit ratings. The reason they are so risky is because the companies that issue them are usually in some sort of financial distress, and it’s believed that they will struggle to repay them. So they promise high interest payments to obtain the income from bond purchases.

When you buy and sell something for investment purposes, whether it be a stock, artwork, gemstones, a bond, a condominium, you know that once you have sold the asset, you have a cost basis, a sale price, and a profit or loss. However, one asset may have made you a 50% profit and taken 15 years, whereas another might only have made 25% but took just two years. How do you quantify which was the investment that earned at a better rate for you? Does compounding enter into the equation? Did the investment asset cost you additional money over the period, such as maintenance, repair, insurance, etc.? These are all factors that are calculated to equate to an annualized return rate, which takes the total return and spreads it out over the period of time it was held, amd averages it out over a 12 month period.

How are interest rates determined? In short, the Federal Reserve plays the main role in determining interest rates. To do this, they use information from the economy and banks. When banks set their interest rates, they look at factors like the borrower’s ability to pay back the loan and inflation risk.

What are general obligation, revenue and double-barreled bonds? General obligation bonds are backed by the place that issued them. So rather than being backed by the revenue that comes from the project associated with the bond, it’s backed by the place itself. Revenue bonds, on the other hand, are backed by the revenue that comes from a specific project...usually things like roadways. Double-barreled bonds are a combination of general obligation and revenue bonds. They are very secure, because if the project doesn’t make as much as expected, the issuing place can cover obligations.

What is the difference between progressive and regressive taxes (flat tax vs. marginal tax)? In the most basic sense, progressive taxes affect the wealthy more and regressive taxes affect the lower-income population more. This applies to companies too; high-income versus low-income companies are affected in the same manner. Progressive tax acts like marginal tax, in that, as income rises, it is taxed more. Flat tax acts like regressive tax because it taxes everyone at the same amount regardless of income.

The inverse relationship refers to the fact that as interest rates go up, bond prices go down, and vice-versa. Bottom line reason is supply and demand. If more people want to buy a bond, the bond itself can pay less interest and still get sold at a higher price, hence the price goes up as interest goes down. If not enough people are interested, the rate needs to rise and price needs to go lower to entice buyers.

What is commission? Commission is incentive based compensation earned by facilitators based on a percentage of the dollar value of the transaction(s) they close. Real estate brokers, sales agents, entertainment industry managers, marketing reps, stockbrokers, and consultants are all professions that earn their money through performance based commissions instead of contractual salary.

What is a Beneficiary? Beneficiaries are named in just about every investment. The beneficiary is the person who receives the profits or distributions from any sort of financial account. In the case of a 529 college plan, the beneficiary would be the child who the owner of the account is saving for. In the case of a life insurance policy, the beneficiary is the person who receives the value of the policy should the owner pass away.

What are accounts receivable and accounts payable? Accounts receivable and payable are figures that show up on a company’s balance sheet. Accounts receivable includes all payments the company is owed (like purchasers buying on credit). On the other hand, accounts payable includes what they owe to others.

What is net worth? You own $100,000,000 worth of Coke stock. That's the good news. Unfortunately, you also have $90,000,000 in debt. Your net worth is $10,000,000.

What is planned obsolescence? Planned obsolescence is the idea that products will need to be replaced. Companies strategize and plan ahead for this, i.e. they intentionally put out product that will deteriorate, so customers will need to purchase replacements. Technology is probably the most recognizable arena for planned obsolescence; people replace their cell phones every few years, and the new cell phones have cooler abilities than the old ones, hopefully.

What are Assets Under Management? The assets under management figure is the market value of all of the investment assets that a financial institution manages for their clients. It’s essentially how much client money or value the firm is handling at the time.

What is a Coverdell Education Savings Account (CESA)/403c? College savings plans, such as the 529, operate similarly to IRAs in that they are allowed to grow tax deferred and spent on education. The Coverdell ESA is similar to a 529, but also allows for use with private elementary, junior high and high school tuition costs, not just college.

What are the economics of government lobbying? Lobbying, which is the act of organizing campaigns and other kinds of activities in order to pressure and influence government officials in matters of policy that are important to the lobbying group’s supporters, is a big business. Billions of dollars are spent annually, and tens of thousands of people are employed as lobbyists in the USA.